FINANCIAL NOTES

MARKET FACTORS.

THE influences operating upon markets during the past week have been of a conflicting character. In the first place, the outflow of gold about the middle of May, together with payments for the new issue of Government Conversion Loan, occasioned considerable stringency in the Money Market, and firmer money rates were partly responsible for the dullness of investment stocks. In the second place, however, the investment section of markets also received rather a shock from the fact that of the New Zealand Loan for £7,000,000 underwriters had to take 85 per cent. That was due to the price having been fixed something like 2 per cent. too high, but the result was like a cold douche on the markets, and the effect was all the more pronounced inasmuch as the lists for the New Zealand Loan had barely closed when a County Council issue was announced for 18,000,000. The New Zealand scrip fell to If discount, and British Funds and all kindred stocks for a time were weak.

* * LARGE GOLD INFLUX.

During the last day or two, however, a more cheerful tone has once again been displayed the investment Section, and. the change in tendency may be said to have been stimulated towards the close of last week when, somewhat unexpectedly, the announcement was made that the Bank of England had purchased 21,600,000 in bar gold. The operation was, no doubt, of an exceptional character, but it greatly stimulated markets, adding, as it did, to supplies of available credits, while it means that since the return to the Gold Standard the net loss of gold by the Bank of England has been compara- tively trifling. In addition, investment Markets 'have also been helped by the remernbrance.That on June 1st more than £50,000,000 in War Loan dividends will be disbursed, the reinvestment of a portion of them usually tending Favourably to affect British Funds.

FRESH CAPITAL ISSUES. _

Nor is the poor success of the New Zealand Loan regarded as any criterion of the real extent of investment resources.

Quite a number of capital flotations during the past ten days have been ahhost eagerly. applied for, and at the moment of writing it looks as though an issue of no less than £4,000,000 in per ceut. Guaranteed Debenture Stock in the Niger Company would be well covered by public subscriptions. A fair number of other industrial flotations are looked for in the near future, and, in addition to the rally in the investment section, there has been a further rise in Rubber shares following the continued advance in the commodity, to which I referred last week.

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INSURANCE SHARES AS AN INVESTMENT.

In the special Banking and Insurance Supplement of the Spectator of March 7th last an article appeared under the above heading in which the view was expressed that the principal attractions of insurance shares as investments might be summarized somewhat as follows :—

(1) Increasing dividends.

(2) Speculative element in amalgamation.

(3) Capital appreciation and bonus by way of capitalization of reserves and the gradual wiping out of uncalled liability. In this survey it was suggested that good results would be shown in Life, Fire and Accident business and better results than were generally -anticipated in Marine.

INSURANCE SHARES STRONG.

Up to the present this forecast has proved to be substantially correct since the General Life Assurance Company has been purchased by the. General Accident Company at £21 per share. Shareholders of the Royal Insurance Company are being relieved of part of their uncalled liability to the extent of 10s.- per share, while increases in dividends have been proposed: by over a dozen companies. The insurance share market at the present time is showing considerable activity with what appears to 132 some strong buying of Prudential fully-paid shares, Phoenix partly paid, and Pelican and Norwich, and Employers'. Liability and Life Association of Scotland, whilst among small-priced shares Gresham Fire and Accident have been in some request.

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LIVERPOOL AND LONDON AND GLOBE RESULTS.

The Report- of the Company is a satisfactory one, and the excellent results of the Fire Department shown in 1923 have been further improved upon. It is evident, in fact, that' the overhauling of administration of the Company's business in America has been thoroughly beneficial. Underwriting profit for the year was £274,979 against £238,154. Additional: reserves in various departments have been increased by a. total of £290,000 transferred from Profit and Loss, while the Fire Fund has been increased by £1,000,000 transferred from= theGeneral Reserve. The title of the Investment Fluctuation: Fund has been changed to General Contingencies Fund, and from it £500,000 has been brought into Profit and Loss, against which £531,050 has been used for reducing Uncalled Liability on each £1 shge from £4 to 23 per share, the balance of the Fund standing in the Balance Sheet at £494,434. An increased final dividend is recommended of 10s. 8d. per share less tax,: making 20s. for the year, as compared with 18s. for 1923.

A. W. K.